Online marketplace Etsy is changing its policies, prompting discussion of what "handmade" means.

Etsy, the popular online marketplace for vintage and handmade goods, is updating its policies to allow sellers to hire staff, use shipping services and apply to have their products made by manufacturers.

The New York-based company known for everything from crocheted Halloween pumpkins to vintage engagement rings held a webcast this week for its 1 million active sellers to answer questions. One question Etsy expected was whether it is "selling out," or would start to allow large corporations like Ikea sell items on the site. With a fiercely loyal and vocal fan base, Etsy CEO Chad Dickerson is bracing for some backlash.

But he stands behind the changes and says Etsy often heard from sellers that the site's previous policies were confusing. Some sellers, he said in a blog post, worked long hours to maintain a one-person shop, while others began to bend the rules. For example, Etsy previously prohibited sellers from hiring employees not in their physical location. That is no longer the case.

With the exception of vintage items and crafting supplies, Etsy had required people to sell things that were "handmade" by them. But Dickerson said the definition was murky from the start.

"Many of us felt we knew handmade when we saw it, but that was hard to put into enforceable policy. What kind of tools could you use? How many hands could shape the product? Could you use mass-produced components to put together something original?" he wrote.

The new guidelines expand the definition of "handmade." Sellers will be allowed to apply to work with outside manufacturers to produce items they designed. Etsy said it will review and approve each application before it lets sellers do this and manufacturers must abide by the company's ethics guidelines.

"We'll ask about your business, your design process, your manufacturer and their production methods. You should be able to demonstrate that you work together very closely," the new guidelines state.

As part of the changes, sellers will be required to have an "about" page that includes information on outside manufacturers they work with, if they do. "Re-selling," that is, selling new, non-vintage items that the seller had no role in creating, is still prohibited.